The Difference Between Credit Unions and Banks
Have you ever wondered what the difference is between a credit union and a bank? At first glance, banks and credit unions are very similar. They both offer a wide range of financial products and services. But if you dig a little deeper, there are some distinct differences. Here are 5 reasons to consider choosing a credit union over a bank.
1. Credit unions are Not-For-Profit cooperatives that exist for the benefit of all members. Banks are for-profit institutions.
2. Credit unions return earnings to members by providing lower cost services, better rates, and lower fees. Banks return earnings to owners (or shareholders).
3. Credit unions insure member deposits to a minimum of $250,000 through NCUA. Banks account holders deposits are insured by FDIC, also to a minimum of $250,000. Both NCUA and FDIC are backed by the full faith of the U.S. government.
4. Credit unions are democratically run institutions, with each credit union member having the opportunity to elect the board of directors. Account holders at banks don't have any direct input in how their bank is run.
5. Credit unions are run by management and employees that live in the same community where members live and work. Banks are often controlled by out-of-state management that has little involvement in the local community.
Choosing to "bank" with a credit union makes all the difference!